PERT Analysis
by Pete Hasek, EDS (member, Southeast Michigan Chapter)
PERT is the acronym for Program Evaluation and Review Technique. It uses a logic network with activity on node. The critical path is calculated for the logic network based on estimated duration of the activities and the links between activities. The process was developed in the 1950s to support large development projects for the Navy.
One of the things that was noticed about the early versions of the process was that the estimated completion dates weren’t very accurate. In fact, the estimated duration for each activity was not very accurate. Basically, each estimate was a single point estimate, and the probability of meeting that estimate within +/- 5% was not very high. Consequently, the effort was made to improve the accuracy by collecting a range of estimates for each activity duration and using a weighted average for the duration estimates in the Critical Path calculation.
Current practice calls for three estimates for each duration: Optimistic (O), Most Likely (ML), and Pessimistic (P). The duration of each activity is calculated using the formula: Duration = (O + 4*ML + P)/6.
Optimistic is the shortest possible time it will take to complete the activity. Think of this as the length of time it takes to commute to work if there are no accidents, no bad weather, and the drive is made during the off hours. Most Likely is the duration that is most likely to occur given the current state of doing business. Think of this as the length of time it usually takes to commute to work, sort of the average value, or more accurately, the commute time that occurs most of the time. (In terms of statistics, it would be the mode.) Pessimistic is the estimate based on assuming that things will go wrong: The activity is much more difficult, personnel will be hard to find, etc. This is analogous to a commute during a snow storm, at rush hour, with multiple accidents; it might be the longest commute ever experienced.
In terms of estimating, it is not uncommon for the Optimistic estimate to be about 90% - 95% of the ML value. However, the Pessimistic estimate could be 2 to 3 times the ML estimate. And remember that people naturally tend to be optimistic when estimating how long an activity will take.
Not every activity must have three estimates. It makes no sense to generate three estimates for Level of Effort (LOE) activities. The estimating process should focus on those activities that are on or near the clear path (i.e., have very little float). It should also focus on those activities that have a high degree of uncertainty, and on those that have never been attempted before.
The benefit of PERT is that the estimate for the duration of each activity is more accurate, and consequently the project completion date is more realistic. It also forces the estimator to think through how each of the values is arrived at, instead of just winging it. This alone will significantly enhance the estimating process.
MS Project & PERT
To start using PERT in Microsoft Project, make sure a project with activities in it is open, and then open the PERT analysis toolbar by selecting View/Toolbars/PERT Analysis. Click the button called PERT Entry Sheet, then click the button called PERT Entry Form. Your screen should look like the one shown here. The estimates for the Optimistic, Expected (Most Likely), and Pessimistic durations can be entered using the dialog box.
Double clicking on the column headings reveals that PERT uses the fields for Duration 1, Duration 2, and Duration 3. Start1/Finish1, Start2/Finish2, and Start3/Finish3 are also used to store the calculated dates.
Obviously one doesn’t need to use the PERT Entry Form if the PERT Entry Sheet is used. Using the scroll buttons to enter the appropriate values for each duration is probably quicker.
There is no requirement to enter data for every task. If PERT estimates are not entered, the calculation algorithm simply uses the value stored in the Duration field.
Once all the data is entered, click on the button that looks like a calculator, called “Calculate PERT”, and the PERT algorithm is executed. Revised values for Start, Finish, and Duration overwrite the previous values. For this reason it is prudent to save the original dates in one of the other sets of date fields, such as Start10/Finish10/Duration10, before running the calculation.
MS Project offers three pre-defined views for viewing the results of the PERT calculation. These can be activated by selecting one of the three buttons that look like Gantt charts. Of course these can be modified to show a direct comparison to the original dates previously saved in Start10/Finish10/Duration10.
MS Project allows the weighting distribution to be changed to something other than the basic formula. Click on the button with balance scales and adjust the values in the “Set PERT weights” dialog box. This process can give greater significance to either the Pessimistic or Optimistic values, and significantly change the completion dates. Use this function judiciously.
I have found that it is far easier to use the tool than it is to garner the estimates to support the tool. Consequently some simple macros can be written to create the Optimistic and Pessimistic values that can help start the dialog on estimating. That will be the topic of another article.
Finally, PERT is most effective when working with large projects with multiple parallel paths and intersecting dependencies. Play with the tool a bit and see if it doesn’t help you manage projects a little better.